Yorkshire housebuilder Gleeson sets aside £13m for cladding crisis works

The company’s latest annual results show that it has recorded an “exceptional provision” of £12.9m in regard to the costs of fixing buildings it had previously been involved in constructing that have now been identified to have fie-safety issues.

It follows then-Housing Secretary Michael Gove announcing in January that developers needed to pay to fix the estimated £4bn for remediating unsafe cladding on 11m to 18m tall buildings.

The move represented a significant U-turn on previous Government policy and meant that leaseholders in buildings between 11m to 18m would no longer have to take out loans to pay for removing cladding, bringing them in line those in high-rise blocks.

The latest results from Gleeson, for the year to the end of June, state: “In April 2022, the Company signed the Department for Levelling Up, Housing and Communities’ (“DLUHC”) pledge in respect of remediating buildings with life-critical fire-safety issues on buildings over 11 metres in which the Group had, over the last 30 years, some involvement in developing.

"Based on the work undertaken on buildings covered under the pledge, the Group has recorded an exceptional provision this year of £12.9m. As a result, Group profit before tax after exceptional items was £42.6m

(2021: £41.7m).”

Gleeson CEO James Thomson told The Yorkshire Post that the company’s does not currently anticipate making further cladding remediation-related payments in future years due to its limited exposure to the issue. In recent years, it has focused on building standard-sized housing.

“We would expect it to be a one-off,” he said of the £12.9m provision in the accounts.

"We stopped building anything other than two, three or four-bedroom homes over 15 years ago.”

Following Mr Gove’s announcement in January, by April more than 35 of the biggest homebuilders in the UK had pledged to fix all the buildings taller than 11 metres that they have played a role in developing over the last three decades.

The decision to fix the cladding was taken after the Grenfell Tower fire in 2017 in which more than 70 people died.

The fire spread rapidly due to the cladding that had been installed on the outside of the tower block.

The Government said earlier this year that leaseholders in high-rises should not have to pay for fixing the dangerous cladding.

Many have been stuck for years in unsafe properties that they cannot afford to fix and cannot find anyone to buy.

Persimmon, Crest Nicholson, Taylor Wimpey, Redrow, Barratt Developments, Bellway, Countryside and Vistry are among the other major firms that have signed the pledge.

In it they promise to act as quickly as possible to fix the buildings, put new building safety guidance in place, and report to leaseholders and Government on their progress.

They also will have to listen to the decisions of a dispute resolution service that was set up by the Government and refund all the money they have already received from taxpayers.

Mr Gove said in April: “I welcome the move by many of the largest developers to do the right thing.

“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”